The International Air Transport Association declared 2020 as the worst-ever year for aviation globally. Operators are estimated to have lost $85 billion collectively, registering an unprecedented net profit margin of 20 per cent in the negative.
The pandemic felled some of the most popular airline companies worldwide: Flybe in the UK, Miami Air in the US, AirAsia in Japan, and OneAirlines in Chile are but a few examples. Others were in freefall and had to be pulled back by governments, big investors, or acquired by competitors. Virgin Australia was sold to Bain Capital, Kenya Airways secured a multi-million state bailout, Air Canada bought out Air Transat.
Grounded airlines, meanwhile, devastated airports. The buzzing corridors filled with a murmur of voices, announcement chimes, and rolling luggage wheels suddenly hollowed out into long, lifeless hallways.
Airports Council International was projecting global revenues to reach $200 billion in 2020. Results turned out to be only two-thirds of that as passenger traffic got suspended for much of the year. European airports were the biggest losers, with revenues declining by 70 per cent and dropping some $50 billion along the way.
The lowest decrease in revenues occurred in the Asia-Pacific region, but at 55 per cent, it was nothing short of a catastrophe. African airports may have registered the lowest shortfall of under $3 billion, but that change was equivalent to 68 per cent of projected revenues.
Lockdowns and safety concerns also left travellers away from navigation. The cruise liner industry was the fastest growing activity in the global tourism sector, surging by a fifth from 2015. Just before the pandemic, analysts predicted a new record of 32 million passengers for 2020 and the industry was valued at a total of $150 billion.
The year started strongly, but by the second quarter, bookings plummeted, sending the share prices of the largest operators crashing by about three-fourths in a matter of weeks. Some players kept operating, but a series of infection cases discovered aboard turned many liners into floating quarantine hotels and caused reputational damage to the whole industry.
Air and sea travel organisations are nodes in a broader economic ecosystem. Many cities depend on the multiplier effects these generate to sustain their economies and the punch to cruise liners, airlines, and ports was a killer blow to local operators such as transport companies, insurance agents, and accommodation services.
But travel companies are not going anywhere anytime soon. While vaccine roll-outs play catch-up with coronavirus variants, the industry is trying to restore consumer confidence and get back on track. The world is learning to move forward; for the time being, travel operators are prepared to take Covid-19 along.
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